A trade-off refers to the decision-making process of giving up one thing in order to gain something else. It involves making choices because resources are limited and individuals or societies cannot have everything they want.
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Opportunity Cost: This term refers to the value of the next best alternative that is forgone when making a choice.
Production Possibilities Frontier (PPF): This term refers to a graphical representation showing all possible combinations of goods and services that an economy can produce given its resources and technology.
Marginal Analysis: This term refers to examining the additional benefits versus costs when making decisions, considering small incremental changes.